Megatrends

The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.

Spotlight on Youth Unemployment

Once again youth unemployment is coming under the spotlight. The consequences of high levels of unemployment, whatever the age of those affected, are widespread with consumer confidence and consumer expenditure particularly impacted. Unemployment is a virulent problem as it spreads fear amongst those with jobs and depresses spending on durable goods in particular.

Top 10 Largest Youth Unemployment Gaps: 2012

Source: Euromonitor International from ILO/Eurostat/national

Note: Data refer to how many times larger youth unemployment is than the general level of unemployment.

Youth unemployment causes long-term damage

With youth unemployment many of these factors are intensified – particularly as there is evidence, from the International Labour Organisation (ILO) that youth unemployment can cause persistent and long-lasting damage. People who are unemployed at a young age can have persistent pay-differentials throughout their careers with their peers who are continually employed, and they can also face long-term difficulty finding employment. Unemployed youth are also often likely to take jobs for which they are over-qualified or part-time work, which also has a detrimental impact on their earnings in the present and the future – particularly if their skills are lost or eroded over time.

Highest Youth Unemployment Rates in the World: 2012

Source: Euromonitor International from ILO/Eurostat/national statistics

This means that even when the economy recovers, a significant portion of young people will be left unemployed for many more years, and that those that do find work are likely to suffer lower incomes throughout their working lives. The young unemployed often feel like they have no voice and this can be a contributory factor in social unrest. At the economic level youth unemployment has important ramifications for productivity, inequality and skills shortages.

The numbers work against the developing world

Youth unemployment is a problem for both advanced and emerging markets alike, however due to sheer demographics, with emerging economies home to 89.2% of the world’s population aged 15-24, it is they who dominate the figures for the total number of unemployed youth.

The World’s Unemployed Youth: 2012

Source: Euromonitor International from ILO/Eurostat/national statistics

The global youth unemployment rate will reach 12.6% in 2013 – near to its peak during the global financial crisis. They estimate that 73 million young people are unemployed globally in 2013

Youth unemployment increased by 24.9% in the Developed Economies and European Union between 2008 and 2012, to reach a recent high of 18.1% in 2012. They project that the youth
unemployment rate in the region will not drop below 17% before 2016

Globally, the ratio of youth to adult unemployment rates stands at 2.7 in 2013

Youth unemployment has important flow-on effects for household profiles – contributing to an increase in the number of multigenerational households – consumption patterns – squeezing spending on clothing and footwear and leisure and recreation amongst other categories – and on income growth both in the short-term and in the long term.